E-Tailing- The Unauthorized Sale
Most manufacturers recognize the problem, and companies such as Philips claim to aggressively go after unauthorized sellers. Linda Olsen, Philips' senior director of e-business, said they usually send letters to unauthorized e-tailers telling them to stop selling Philips products, and that 90 percent of the time that works. They have also instructed all their distributors not to sell to unauthorizeds. If Philips catches distributors or retailers selling to forbidden dealers by tracking serial numbers, Philips will cut off the supply to that seller. "We certainly have it more under control now," Olsen said. "The main reason is that there aren't as many sites out there now."
Philips and other companies such as Pioneer tend to authorize established click and mortar retailers for online sales, with a couple bigger "pure play" dealers like Amazon.com or 800.com rounding out the list. Pioneer and other companies like Denon also warn customers from their Web sites that warranties will be voided if they purchase from unauthorized e-tailers, and note that they may be buying b-stock or non-functioning items from unauthorized sites.
Zenith is one of the rare companies that honors warranties even if a customer buys from an unauthorized seller. "We want that person to be happy regardless," said Rick Powers, vice president of sales. He also said that Zenith constantly monitors the situation, and he thinks they do a good job curbing unauthorized sales. "Online there are guys who pop up out of their bedroom, but I think people are very astute when it comes to buying online," he said. They tend to stick with the bigger, established names, not Toysfordad.com or the million of them out there."